Frank Arnesen will step down as Chelsea's sporting director at the end of this season, the club have confirmed.

The Dane has spent five years at Stamford Bridge, overseeing the club's youth development and other areas, but has announced his intention to leave when his contract expires in the summer, in order to "seek a new challenge".

Arnesen, who joined Chelsea in 2005 after previously working at Tottenham, said: "It has been a privilege and an honour for me to work for such a big club with so many great people.

"After six wonderful years I have decided to seek a new challenge when my contract expires at the end of this season. It has been a tremendous journey and I would like to thank everyone at Chelsea, especially Roman [Abramovich], for giving me the incredible opportunity to help build on the club's academy and youth system along with our greatly talented academy and scouting staff.

"We are now seeing the fruits of that labour as our stated aim was to get one player from the academy into the first team each year from 2010. We have a great crop of young players now coming through, and I feel it's the right time for me to start looking towards a new challenge.

"The past two years I've worked more closely with the first team as sporting director, and it has been a joy to work alongside [the manager] Carlo Ancelotti and this exceptionally talented squad and staff.

"It is always difficult to take big decisions like this, but it is entirely my decision. I'm looking forward to continuing my work here until such time as the club decides which way they want to move forward.

"With that in mind I wanted to make the decision now, giving the club plenty of time to make the necessary plans for the end of the season. I will always be grateful to the club and Chelsea will always be in my heart."

Chelsea's chairman Bruce Buck said: "Frank has spoken to me several times over the past year with regards to seeking new challenges, so his decision comes as no surprise to us. Frank has done an exceptional job here at Chelsea over the last six years and the incredibly strong academy and youth system Frank leaves behind him is a fitting tribute to his time at Chelsea.

"We do appreciate that he has given us plenty of notice, which gives us time to consider whether and how we restructure the football department. Frank has told us he has thoroughly enjoyed his time at Chelsea and we've thoroughly enjoyed having him. On behalf of everyone at the club I thank him for all his efforts and wish him well as he considers his next football challenge."